Michael Schallehn: The Five Battlegrounds of the Internet of Things

As the Internet of Things grows in popularity, companies can use connected devices to obtain data that drive insights for customers. Michael Schallehn, a partner with Bain's Technology practice, discusses five different IoT battlegrounds and how executives can take advantage of the different use cases and opportunities within each one.

MICHAEL SCHALLEHN: The Internet of Things is grabbing a lot of attention, which is fueled by forecasts from analysts but also investment of the tech vendors in that area. And so we are discussing with executives how to get mobilized.

The first thing that we are telling them is, hey, it's not just about the device or the thing that is getting connected. It's also about getting the data from the device all the way into the data center or into the cloud, and then running advanced analytics there in order to derive new insights for your customers.

The other dimension which makes this space complex are all the different types of use-cases. Some are more consumer-centric and others are much more enterprise-centric. And along those two dimensions, we have identified five different battlegrounds.

The first one is a consumer battleground, where the mobile ecosystem vendors are trying to expand their services into areas such as variables or the smart home. We're going to expect a lot of competition there. The second battleground is around enterprise and industrials.

This is a great opportunity for the incumbent vendors, such as device and equipment manufacturers, because they really know their customers very well and they have a great understanding of the use-cases in areas such as oil and gas or discrete manufacturing. But these vendors cannot do it alone. They need to cooperate with cloud-service providers and analytics vendors from the third battleground: the analytics battleground.

And we are going to expect many platform-battles taking shape as those companies try to attract developers on their analytics platforms. The fourth battleground—networking—ties it all together, where telcos and telco equipment vendors are going to be active and try to position themselves with new types of workloads, such as edge analytics.

The fifth battleground—autonomous—is some sort of ground-zero opportunity, because you have new types of devices like drones, but also new use-cases such as autonomous cars. And this is a great opportunity for incumbents, as well as disruptors, because of the newness of this type of innovation.

So executives really need to ask themselves: In which battleground am I active? Do I have a use-case with a strong value proposition for my customers? How do I deliver this solution—either alone or by partnering? And most importantly, probably, what happens if I'm not engaging right now?